Geys v Societe Generale, London Branch

JurisdictionEngland & Wales
CourtSupreme Court
JudgeLord Hope,Lady Hale,Lord Wilson,Lord Carnwath,Lord Sumption
Judgment Date19 Dec 2012
Neutral Citation[2012] UKSC 63

[2012] UKSC 63

THE SUPREME COURT

Michaelmas Term

[2011] EWCA Civ 307

Before

Lord Hope, Deputy President

Lady Hale

Lord Wilson

Lord Sumption

Lord Carnwath

Societe Generale, London Branch
(Respondent)
and
Geys
(Appellant)

Appellant

David Cavender QC

Abra Bompas

(Instructed by Fox Williams LLP)

Respondent

Christopher Jeans QC

Ian Gatt QC

Amy Rogers

(Instructed by Herbert Smith Freehills LLP)

Heard on 17 and 18 October 2012

Lord Hope
1

The appellant, Raphael Geys, is a Belgian national. He is in dispute with his former employer, Société Générale, London Branch ("the Bank"), about the amount due to him following his summary dismissal from his employment. His case is that he was dismissed on 6 January 2008, and that he is entitled to a sum contractually due to him in the form of a termination payment amounting to more than €12.5m and to damages for breach of contract. The Bank's case is that the appellant is entitled to a termination payment of no more than €7m, as he was dismissed on 29 November 2007 or at the latest 18 December 2007. It also maintains that, having regard among other things to the terms of his employment contract, it is not open to the appellant to claim damages. The case went to trial before Mr George Leggatt QC sitting as a Deputy High Court Judge. On 25 March 2010 he found that the appellant was dismissed on 6 January 2008. He gave judgment for the appellant in a sum to be assessed, with a payment on account by 1 April 2010 of €11m, less tax and national insurance contributions, together with interest on all sums due at 1% above base rate from 3 February 2008: [2010] EWHC 648 (Ch), [2010] IRLR 950.

2

The Bank appealed against that decision on various grounds. The first two related to the date of the appellant's dismissal. For reasons that will be explained later, the choice of date has significant consequences for the amount that is contractually due to the appellant as a termination payment. The first ground raised the question as to whether, in the context of employment law, a repudiatory dismissal of an employee will by itself terminate the contract even if its repudiation is not accepted. The second raised the question as to when, having regard to the relevant provision in the contract, the right to terminate was validly exercised. The effect of its submissions on these issues, if sound, is that the appellant's employment was terminated at the latest on 18 December 2007. The third ground related to the construction of a paragraph in the appellant's employment contract which obliged the Bank to ensure that any bonus award made to the appellant was made in as tax efficient a manner as was possible. The fourth and fifth grounds related to the construction of provisions in the employment contract for the entering into by the appellant of a termination agreement in the event of his employment with the Bank being terminated. The Bank's case is that the contract provided for a clean break when the employment was terminated and excluded the possibility of claiming damages.

3

The Court of Appeal (Arden, Rimer and Pitchford LJJ) dismissed the Bank's appeal on the first and fifth grounds, but allowed its appeal on the second, third and fourth grounds and found that the appellant was dismissed on 18 December 2007. It dismissed a cross-appeal by the appellant as to the date of his dismissal: [2011] EWCA Civ 307, [2011] IRLR 482. The appellant now appeals to this court on the issues raised by the second and third grounds. The Bank cross-appeals against the dismissal of its appeal on the first ground.

The facts
4

On 9 February 2005 the appellant commenced employment with the Bank as the managing director of its European Fixed Income Sales, Financial Institutions Division. He was provided with a written contract of employment. It was offered to him by a letter dated 28 January 2005 with which there were enclosed, among other things, two copies of a contract of employment ("the Contract") and a copy of the Staff Handbook of the SGUK Group ("the Handbook"). He indicated his acceptance of the offer in the way that the letter required of him and, having done so, commenced his employment.

5

The Contract, in which the Bank was referred to as "the Company", contained the provisions that a contract of this kind would be expected to set out as to commencement, job title, remuneration, working hours and duties, overtime, holiday, notice, restrictions upon and after termination of employment, disciplinary rules, choice of law and confidentiality. There was also, in paragraph 5, an elaborate section which extended to more than eleven pages dealing with the employee's entitlement to participate in bonuses under the Bank's Fixed Income Sales Scheme (FISS) referred to in paragraph 5.2. It included provision for the making of a termination payment in the event of the termination of the employment, in consideration for which the employee was to enter into a termination agreement in the terms set out in a schedule. Various events that might give rise to a termination were provided for in paragraph 5. Paragraph 13, under the heading of "Notice", was in these terms:

"Your employment can be terminated on the expiry of 3 months' written notice of termination given by you to the Company or by the Company to you."

6

In paragraph 5.14 it was provided that, if the Company were to terminate his employment in circumstances other than those contained in sub-paragraph 5.6(b)(i)-(iv) (which did not apply in this case):

"the Company will, within 28 days after such termination of your employment, make a payment to you (the 'Termination Payment') as specified in paragraph 5.15."

By paragraph 5.15 it was provided that the Termination Payment was to be equal to the aggregate of (a) the value of the proportion of any award by way of bonus that had been made to the employee but retained by the Company and not yet released, and (b) a Compensation Payment calculated by reference to the date of the termination of his employment. The relevant sub-paragraphs are as follows:

"(iii) if your employment terminates after 31 December 2006 but before 1 January 2008, the Compensation Payment shall be 0.65 x (S divided by 2) where S is the aggregate of any award or awards made to you under the FISS and the Scheme (whether or not subject to the Deferral under paragraph 5.7) in respect of the calendar years ending 31 December 2005 and 31 December 2006;

(iv) if your employment terminates after 31 December 2007 but before 1 January 2009, the Compensation Payment shall be 0.65 x (T divided by 2) where T is the aggregate of any award or awards made to you under the FISS and the Scheme (whether or not subject to the Deferral under paragraph 5.7) in respect of the calendar years ending 31 December 2006 [and] 31 December 2007."

The difference between the payments that would be due to the appellant under sub-paragraphs (iii) and (iv) respectively, depending on the date of his dismissal, has not been precisely identified in these proceedings. But it is common ground that it is substantial. So the answer to the question as to the date when the appellant's employment was terminated will have a significant bearing on the amount to which he is entitled by way of a termination payment under the contract.

7

Section 1 of the Handbook, in which the Bank was referred to as "SG", contained a number of additional terms and conditions of employment. Among them was the following paragraph:

"8. Notice Periods

8.1 Your Right to Notice

Your entitlement to written notice of termination from SG is the longer of:

• The period set out in your Contract; or

• 1 week for each complete year of service up to a maximum of 12 weeks' notice after 12 years' continuous service.

No notice or payment in lieu of notice will be given where SG is entitled to dismiss you immediately without notice or payment in lieu of notice …

Notice given by SG in writing shall be deemed to have been given by SG upon either being handed to you or sent to your home address (as last notified by you to HR). If such notice is sent by post, it shall be deemed to have been received by you on the second day after posting.

8.2 Giving Notice

You are required to give SG the period of written notice set out in your Contract.

Without prejudice to any other contractual rights and duties relating to your employment, if you fail to give the correct period of notice, SG may require you to give the correct period of notice as required by your Contract.

If SG does, at its absolute discretion, accept less than full notice from you:

• You shall not be entitled to payment in respect of salary or to receive contractual benefits for the period of notice not worked;

• You may only be entitled to accrued but untaken holiday pay in respect of that holiday year at SG's discretion; and

• You will remain subject all contractual and legal restrictions and obligations.

8.3 Termination by SG and Payment in Lieu of Notice

SG reserves the right to terminate your employment at any time with immediate effect by making a payment to you in lieu of notice (or, if notice has already been given, the balance of your notice period) based upon the value of your:

• Basic annual salary; and

• Flexible benefits allowance;

for your notice period (or, if notice has already been given, the balance of your notice period)."

8

Paragraph 17 of the Contract, under the heading "General Information", was in these terms:

"This contract is in conjunction with the offer letter, the Staff Handbook of the SGUK Group (as amended from time to time) and the SGUK Compliance Manual which, together with this letter, form the written particulars of employment as required by law. However, in the event of any conflict of any terms set out in this Contract and those contained in the Handbook the terms of this contract will prevail."

9

On 29 November 2007 the appellant was...

To continue reading

Request your trial
110 cases
  • Ashworth and Others v The Royal National Theatre
    • United Kingdom
    • Queen's Bench Division
    • 15 April 2014
    ...19 Before addressing these submissions, let me outline the key authorities in the area. In Geys v Société Générale [2012] UKSC 63; [2013] 1 A.C. 523 Lord Wilson restated the long held view that the remedy of specific performance, or an analogous injunction, should not be available to requi......
  • MSC Mediterranean Shipping Company SA v Cottonex Anstalt
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 12 February 2015
    ...whether to accept the repudiation as terminating the contract or whether to keep the contract in force: see e.g. Geys v Société Générale [2013] 1 AC 523. If the innocent party chooses to terminate the contract, two consequences ensue: first, both parties are released from all their current ......
  • Sunrise Brokers LLP v Michael William Rodgers
    • United Kingdom
    • Queen's Bench Division
    • 29 July 2014
    ...for the parties 36 Mr Duggan QC, who appears for Sunrise, takes his stand on the recent decision of the Supreme Court in Societe Generale, London Branch v Geys5. In that case, Lord Wilson JSC (with whose reasoning Lord Hope of Craighead DPSC (and therefore the rest of the majority) agreed 6......
  • Alan Ramsay Sales & Marketing Ltd v Typhoo Tea Ltd
    • United Kingdom
    • Queen's Bench Division (Commercial Court)
    • 8 March 2016
    ...to bring the contract to an end, or the doing of something which is inconsistent with its continuation" (per Lord Hope DPSC in Societe Generale v Geys [2012] UKSC 63; [2012] 1 AC 513 at [17]); see Chitty on Contracts 31 st edition at [24–003] and [24–013]. (2) In those circumstances, ......
  • Request a trial to view additional results
3 firm's commentaries
  • Contractual interpretation disputes from the Trustee's perspective: The saga continues
    • United Kingdom
    • JD Supra United Kingdom
    • 23 June 2016
    ...in Liverpool City Council v Irwin [1977] AC 239, 254, 258, 262 and 266 respectively, Baroness Hale JSC in Geys v Societe Generale [2013] 1 AC 523, par. 55 and Lord Carnwath JSC in Arnold v Britton, par. In M&S v BNP, Lord Neuberger also referred to the additional conditions that have to......
  • UK Employment Law Update - January 2013
    • United Kingdom
    • Mondaq United Kingdom
    • 28 January 2013
    ...general law on discrimination on the grounds of religion or belief. When is a contract terminated? Geys v Société Générale, London Branch [2012] UKSC 63 By a majority decision, the Supreme Court agreed with the High Court's decision that an employee's contract continued until the date he re......
  • Ending It All
    • United Kingdom
    • JD Supra United Kingdom
    • 10 January 2013
    ...to vest if notice had not been properly served. Either way, these are costly cases to get wrong. Geys v. Société Générale London Branch [2012] UKSC 63 ...
1 books & journal articles
  • CONTRACT DAMAGES AND THE PROMISEE'S ROLE IN ITS OWN LOSS.
    • Australia
    • Melbourne University Law Review Vol. 42 Nbr. 2, April 2019
    • 1 January 2019
    ...III(B). (229) Carter, Carter's Breach of Contract (n 148) 492-8 [10-51]-[10-54]. (230) See also Geys v Societe Generale, London Branch [2013] 1 AC 523, 565 [114] (Lord Sumption JSC) ('Geys') (Lord Sumption JSC ultimately dissented in relation to the final result) (right to affirm a contract......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT